Severstal Gold to acquire Sacre-Coeur Minerals, Ltd.

Severstal Gold N.V. (“Severstal Gold”), a subsidiary of OAO Severstal (“Severstal”) (LSE: SVST; RT CHMF), is pleased to announce that that it has acquired 3,900,000 common shares (“Common Shares”) of Sacre-Coeur Minerals, Ltd. (“SCM”), at an average price of CAD$1.5444 per Common Share, as part of its plans to acquire SCM. The purchase takes Severstal’s ownership to 19.67% of the issued and outstanding Common Shares of SCM.

Severstal Gold and SCM have entered into a binding agreement for Severstal Gold to purchase all of the outstanding common shares of SCM not currently owned by the Purchaser and its affiliates for a cash consideration of CAD$1.60 per share. Severstal Gold will also purchase for cash all of the outstanding warrants and all of the outstanding options (vested and not yet vested) of SCM for a cash payment equal to the difference between CAD$1.60 and the exercise price of the respective warrant or option (the “Transaction”). The purchase price represents an 88% premium over SCM’s average closing price for the 20 trading days on the TSX Venture Exchange preceding SCM’s related press release of September 8, 2010. The total consideration for Severstal Gold’s acquisition of SCM is expected to be approximately $65mln USD.

The Transaction is subject to successful completion of due diligence. SCM has agreed not to solicit or accept any competing offer, except in certain circumstances. If the Transaction is not completed under certain of these circumstances, SCM has agreed to pay to Severstal Gold a termination fee of CAD$2.75 million. SCM has also provided Severstal Gold with certain customary rights, including a right to match competing offers.

Irwin A. Olian, Jr., Sacre-Coeur’s principal shareholder, has executed a voting agreement in favour of Severstal Gold, pursuant to which he has agreed to support the Transaction. The special meeting is expected to be held in November 2010 and the Transaction is expected to close within three business days after the meeting.

Nikolai Zelenski, CEO of Severstal Gold, said:“We believe that Sacre-Coeur provides an excellent entry point into South America for Severstal Gold. SCM has an attractive portfolio of exploration assets in Guyana. This transaction advances Severstal Gold’s stated growth strategy, notably by expanding the geographic diversity of our exploration assets, increasing our resource base and further demonstrating our commitment to value enhancing acquisitions.”

Morgan Stanley & Company Limited and Cassels Brock & Blackwell LLP are acting as the financial and legal advisors to Severstal Gold on this transaction. Fasken Martineau DuMoulin LLP is acting as the legal advisor to Sacre-Coeur.

About Severstal
OAO Severstal is one of the world’s leading integrated steel and mining companies with listings in Russia and on the London Stock Exchange., Its main assets are in Russia, Ukraine, Kazakhstan, Italy, France, the USA and Africa. The company focuses on high value added and unique niche products. In 2009, Severstal produced 16.7 million tonnes of steel.

Severstal Gold is an established international, pure-gold producer focused on emerging markets with currently eight producing mines, two development projects, five advanced exploration projects and a broad portfolio of early exploration projects and licenses located across West Africa in Guinea and Burkina Faso, Kazakhstan and the Russian Federation. The production was 529 Koz in 2009 and the company plans to increase its gold production to 1.0 Moz in the next three years.